Tax revenues of local budgets in the context of local government reform

The article reveals the current state of the revenue base of local budgets in Russia in the context of reforming the organization of local self-government. Based on the analysis of open data from the Ministry of Finance of the Russian Federation, it has been concluded that the opportunity provided in 2019 to the constituent entities of the Russian Federation to independently make the transition to a single-tier system of local budgets and the ongoing socio-economic processes did not have a noticeable impact on the dynamics and structure of municipal budget revenues; gratuitous receipts still account for a significant share of total local budget revenues: 66.2% in 2021, 67.8% in 2022, 67.4% in 2023, 64.8% in 2024. The purpose of the study is to substantiate proposals to increase tax revenues of local budgets, which would enhance the fiscal autonomy of municipal authorities and foster socio-economic development. Applying general scientific methods of cognition, the ­authors propose two groups of measures: legislative (expanding the powers of local representative bodies regarding land tax rates and exemptions; defining income types exempt from professional income tax; and converting the tourist tax into a strictly targeted tourist fee) and practical (identifying tourist tax payers who use land plots designated for individual housing construction for entrepreneurial activities; and continuing municipal efforts to reduce informal employment and hidden wages). These proposals can be applied in developing recommendations for managing financial relations in municipalities.

1. Gerasimova, K. A. (2024). Directions for increasing the financial independence of municipalities. Scientific Notes: Market Economy and Financial and Credit Relations, (31), 6–9. IPK RSEU (RINH). (In Russian).

2. Matyushkina, I. A., & Mikhaleva, O. M. (2024). Digital transformation of local governments. Management in Russia and Abroad, (2), 20–28. (In Russian).

3. Gotsko, T. V. (2023). Key trends in municipal finance management in the context of global challenges. Issues of Territorial Development, 11(1), 1–11. (In Russian). https://doi.org/10.15838/tdi.2023.1.63.5

4. Maksimov, A. N., & Levina, V. V. (2024). Budgetary provision of Russian cities. Budget, (12), 72–77. (In Russian).

5. Rukina, S. N., Gerasimova, K. A., Takmazyan, A. S., & Samoilova, K. N. (2024). Directions for the development of socially oriented taxation of income of Russians. Vestnik universiteta, (9), 213–222. (In Russian). https://doi.org/10.26425/1816-4277-2024-9-213-222

6. Tokaeva, S. K., & Tuaeva, L. A. (2021). Problems of strengthening the tax potential of the constituent entities of the Russian Federation with the current fiscal mechanism. Financial Life, (4), 36–40. (In Russian).

7. Panskov, V. G. (2024). Land tax: problems and ways of improvement. Finance, (1), 13–19. (In Russian).

8. Zotikov, N. Z. (2025). Value added tax under the simplified taxation system: consequences for business and budget. Vestnik universiteta, (1), 201–211. (In Russian). https://doi.org/10.26425/1816-4277-2025-1-201-211

9. Malis, N. I. (2024). Problems of increasing the role of small business in generating own revenues of local budgets. Finance, (6), 22–28. (In Russian).

10. Golovanova, N. V. (2025). Challenges and opportunities. The NIFI view on local self-government reform. Budget, (6), 55–57. (In Russian).

11. Dmitriev, V. M., & Rukina, S. N. (2025, December 4). Tourist tax: Pros and cons [Conference presentation]. International Scientific and Practical Conference «Modern Instruments of Tax Regulation in the Context of Transformation of Socio-Economic Processes», Rostov-on-Don, Russia. (In Russian).

12. Stroyev, V. V., Svistunov, V. M., & Sidorenko, S. V. (2024). Regional economic policy, goals, results assessment (the Krasnodar region case). E-Management, 7(3), 31–39. (In Russian). https://doi.org/10.26425/2658-3445-2024-7-3-31-39

13. Ivanov, I. N., Orlova, L. V., & Sundukova, G. M. (2024). On the prospects of small and medium-sized businesses in Russia. Vestnik universiteta, (7), 110–117. (In Russian). https://doi.org/10.26425/1816-4277-2024-7-110-117

14. Zagursky, A. O. (2025). Tax on professional income: Potential for implementation in the activities of personal subsidiary farms of citizens. Finance, (7), 24–30. (In Russian).